It’s that time of the month again: NADAC survey results week. There was a lot of movement on drug prices, so be sure to click through our new updated visualizations (NADAC Change Packed Bubble Chart and Drug Pricing Dashboard) to see the impact. Let’s see if the Santa left some gift-wrapped drug pricing deflation under the tree.

In now our fourth month issuing this report, this is a first - more generic drugs went up than went down this month. This month for every generic drug that experienced a price decline, there were 1.14 generic drugs that experienced a price increase. Last month, for every drug that experienced a price decline, only 0.71 generic drugs experienced a price increase. Figure 1 shows the full histogram comparing this month to last month. There were 25% more generic drugs that experienced a 0-10% price increase, and 92% more generic drugs that experienced a price increase of 10-20%. While one month certainly doesn’t make a trend (nor does it erase all of the momentum of the past few months), it’s nonetheless, not a great month. It’s jingle bells, but Batman smells.

As we’ve written in prior updates, knowing the price change alone is not enough. We need to apply utilization to the price changes, which is the purpose of the NADAC Change Packed Bubble Chart. We use Medicaid’s first half 2018 mix and annualize it to arrive at an estimate of the total dollar impact of the latest NADAC pricing update. After doing all the math, despite the number of drugs that increased in price, we get this latest round of price changes to be worth $17.5 million in savings to Medicaid. That’s no lump of coal, but it isn’t a Turbo Man either.

3. Are ADHD drug prices really coming down?

One of the key reasons why the overall mix still deflated was because Methylphenidate (generic Concerta) posted a solid pricing decline, and Medicaid buys a boat load of Methylphenidate (nearly $600 million of spend in 2017 on the top three strengths).

We don’t see any new competition in the market, so there doesn’t appear to be a clear driver we can point to behind the clear downward trend (which has been at times erratic). And with this drug being a Class II DEA controlled substance (which means that the DEA is closely monitoring the supply available on the market), there will likely always be challenges to sizable increases in supply that could put substantial pressure on price.

But let’s not look a gift horse in the mouth – just looking at the math, if we had to pick one drug to bring down in price out of Medicaid’s entire mix it would be this one, especially since it was under scrutiny last year for its price increases. So we’ll just be grateful for this month’s decline and keep an eye out for any material movements in the future. This is a leg lamp full of state savings, and it belongs in our front-room window.

Earlier this year, a common HIV medication, AbbVie’s Norvir, finally saw generic competition enter the market. West-Ward Pharmaceuticals (now known as Hikma) announced the release of an authorized version of the generic, Ritonavir, on March 20, 2018.

At that time the price for brand-name Norvir 100 MG Tablet was around $8.30 per unit. By the time CMS started registering pricing data in their survey, generic Ritonavir had already hit $6.10 per unit. Within three months, the NADAC price eroded to $5.68 per unit, and as of last month had hit $4.30 per unit. The price had almost been cut in half within around half a year.

The latest survey saw its biggest wave of deflation yet, now that there are six different labelers in the market. The price has dropped to $2.47 per unit (Figure 3).

Given what we’ve learned about PBM markups on generic drugs that recently enter the market, it will be interesting to see if Ritonavir follows the trend of other HIV medications like Valganciclovir (generic Valcyte) as CMS releases new State Utilization Data showing what state Medicaid programs are being charged for this drug. Although it’s too early to tell for sure, the initial data from Q2 2018 in our Medicaid Drug Pricing Heat Map looks as though there are several state Medicaid managed care programs whose PBMs may not be so quick to pass along these recent savings opportunities on Ritonavir. The 46brooklyn Elf on the Shelf will be watching.

5. Bisoprolol Fumarate has doubled in price

One of the drugs that saw the biggest jumps in price was both strengths of generic Zebeta (Bisoprolol Fumarate, 5 MG & 10 MG Tablets), a beta blocker for hypertension. This drug, which was first released as a brand-name product in 1992, and then as a generic in late-2000, for all intents and purposes was a mature, cheap generic drug. As of last month, Bisoprolol Fumarate 5 MG Tablet’s NADAC price was $0.24 per unit, and Bisoprolol Fumarate 10 MG Tablet’s NADAC price was $0.26 per unit. This month, they doubled in price to $0.50 per unit and $0.53 per unit, respectively (Figure 4).

The FDA is currently reporting a shortage of the drug that could stretch well into the first half of next year, which does not bode well for the price projections of this previously inexpensive drug. This is an unfortunate development when looking backwards at the pricing trajectory of this drug. Essentially, this recent price spike wiped out more than five years worth of pricing deflation in just one month. Bah Humbug.

What are you seeing?

While we spend more time than we’d like to admit studying the pricing changes during each NADAC Survey Results Week, we don’t always catch every story worth noting. If you’re seeing any interesting movement on drugs in the dataset, let us know.

On a personal note, we’d like to wish you and your families a happy holiday season. Although we’re just approaching our 5-month anniversary, we really appreciate you coming along for the ride. Be sure to keep sending feedback, and share our site with those who love learning about the drug supply chain, or those who don’t but have trouble sleeping.